Arkansas Court Ruling Stirs Up Controversy Over Private-Club Law

LITTLE ROCK — The state Court of Appeals served up a new round of controversy over Arkansas’ private club law with a ruling last week that said enhancing the dining experience is sufficient justification to serve alcohol at a restaurant in a dry county.

Critics, including a dissenting judge, say the ruling subverts the intent of the private club law. Others say the ruling is perfectly in line with the intent of the law: Promoting economic development in the state.

Five members of a six-judge panel of the appeals court agreed that a circuit judge was right to uphold the private club permit of Lamar’s Bistro, a club within the Bayou Bistro restaurant at Magnolia in dry Columbia County, despite the applicant’s acknowledgement that the club would exist for the sole purpose of serving alcohol to diners at the restaurant.

A 1969 law allows a private club to exist in a dry county as a nonprofit corporation with certain purposes “other than the consumption of alcoholic beverages.” For decades, those purposes were limited to things such as benevolent works of the type that might be performed by a fraternal lodge or an athletic club.

In 2003, the law was amended to add three more purposes for private clubs — community hospitality, professional association and entertainment. The change made it easier for restaurants to obtain private=club permits.

In its ruling last week, the Court of Appeals said dining out “constitutes a form of entertainment,” so Lamar’s Bistro meets the definition of a private club if it enhances the dining experience.

Judge Rita Gruber wrote in a dissenting opinion that the ruling ignores that the law still requires clubs in dry counties to have a purpose other than the consumption of alcohol.

Jerry Cox, president of the Christian conservative Family Council, said the ruling appears to remove what few restrictions have been imposed on restaurants in dry counties seeking private club permits.

“I don’t believe the Legislature ever intended to open the door that wide,” he said.

But former Democratic state Rep. Betty Pickett of Conway in dry Faulkner County, who sponsored the 2003 legislation that added entertainment to the purposes of a private club, said the ruling sounds like something with which she would agree.

Pickett said she would oppose allowing bars and liquor stores in dry counties, but she favors allowing restaurants to serve drinks to their customers. She said she filed her bill to promote economic development.

“I live in Conway, and the business people in Conway felt like we were missing out on a lot of economic development opportunity because we didn’t have restaurants that served alcohol. And I believe that since that bill passed, Conway has just boomed,” she said.

Bob Hester of the anti-alcohol group Citizens for Responsive Government said the same claim has been made about Jonesboro in dry Craighead County where he lives, but he questioned whether the economic growth in either place can be attributed to the private-club law. Faulkner and Craighead counties were already booming before 2003, he said, adding that restaurant chains are unlikely to pass over a booming area just because it’s in a dry county.

‘They’re going to go where the money is,” he said.

Hester called last week’s ruling by the Court of Appeals “goofy” but said it merely upholds the way the state Alcoholic Beverage Control Board has been interpreting the law since 2003.

“All you’ve got to do is make an application and they’re going to grant it,” he said.

ABC Director Michael Langley said that as the ABC Board has interpreted Act 1813 of 2003, the law allows it to consider economic development when reviewing an application for a private club permit.

“It gave the board the ability to look at maybe a little bit broader aspect of it, to say … people from other towns or other states come in and have certain expectations in the places that they meet,” he said.

The Court of Appeals’ ruling appears to support the board’s interpretation, Langley said.

Cox said the way the private club law is interpreted by the ABC — and by the Court of Appeals — gives businesses a way to subvert the intent of voters who chose to declare their county dry.

“Dry ought to mean dry, and wet ought to mean wet. I don’t like having to deal with all this murkiness between the two,” he said.

Pickett said Arkansans who want to change the status of their county from dry to wet face a tough hurdle. They are required to collect the signatures of 38 percent of registered voters in the county just to get a proposal on the ballot.

“That is a very, very, very stiff requirement,” she said.

Hester noted that Boone and Clark counties met that requirement and voted themselves wet in November 2010. He said a tough hurdle is appropriate because it “prevents it from coming up every election cycle.”

Pickett said the private-club law creates “kind of a middle ground” between wet and dry.

“It allows people to have drinks or wine with their dinner in a nice restaurant, but it also means that you don’t have to put up with the package stores and what comes along with that,” she said.